1 Last year Dania Corporation's sales were $525 million. If sales grow at 7.0% per year, how large (in millions) will they be 8 years later? A. $1,028.33 B. $757.72 C. $793.80 D. $1,109.52 E. $902.05

2. Suppose the U.S. Treasury offers to sell you a bond for $547.25. No payments will be made until the bond matures 5 years from now, at which time it will be redeemed for $1,000. What interest rate would you earn if you bought this bond at the offer price? A. 13.84% B. 12.17% C. 11.66% D. 11.40% E. 12.81%

3. Bob has $2,500 invested in a bank that pays 1% annually. How long will it take for his funds to double? A. 74.54 years B. 79.41 years C. 73.14 years D. 69.66 years E. 84.99 years

4. What's the rate of return you would earn if you paid $3,680 for a perpetuity that pays $85 per year? A. 2.01% B. 1.99% C. 2.73% D. 2.15% E. 2.31%

5. What's the present value of a 4-year ordinary annuity of $2,250 per year plus an additional $2,950 at the end of Year 4 if the interest rate is 5%? A. $11,133.74 B. $8,740.50 C. $10,405.36 D. $8,532.40 E. $12,590.49

6. Suppose you just won the state lottery, and you have a choice between receiving $2,075,000 today or a 20-year annuity of $250,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes. A. 11.10% B. 10.38% C. 12.14% D. 9.44% E. 11.83%

7. Suppose you borrowed $20,000 at a rate of 8.5% and must repay it in 5 equal installments at the end of each of the next 5 years. How much would you still we at the end of the first year, after you have made the first payment? A. $14,795.97 B. $13,133.50 C. $13,964.74 D. $16,624.68 E. $13,798.49

8. Your sister turned 35 today, and she is planning to save $20,000 per year for retirement, with the first deposit to be made one year from today. She will invest in a mutual fund that's expected to provide a return of 7.5% per year. She plans to retire 30 years from today, when she turns 65, and she expects to live for 25 years after retirement, to age 90. Under these assumptions, how much can she spend each year after she retires? Her first withdrawal will be made at the end of her first retirement year. A. $200,362.24 B. $155,837.30 C. $183,665.39 D. $185,520.60 E. $157,692.51